Price Isn’t Everything When Purchasing A Home
March 7, 2017
A COUPLE OF THINGS TO THINK ABOUT
1) There are many details to negotiate beyond the initial purchase price
2) You likely won’t live there forever.
Oftentimes I review offers where the buyer comes out swinging, ready to see what the seller is made of, and if they are ready to deal. Many times the buyer knocks the seller right out of the negotiating ring. Here is something to keep in mind; the offer to go under contract is just the first round of negotiations. During the contract period other items may need to be negotiated. Repairs, inspection times, and the closing date just to name a few. If the buyer beats the seller up too much in the beginning to “see where they are at”, the buyer could potentially have tougher times ahead after they have already invested in inspection and appraisal costs.
When an aggressive offer is made, and the buyer and seller go back and forth a few times, it is common to hear a buyer comment, “Let’s just meet in the middle”. Keep in mind that the “middle” is all about perspective. Let’s say an offer comes in at 10% off a $200,000 asking price ($20,000) and the seller counters at $5,000 off asking price. Meeting in the middle for the buyer is $10,000. The seller’s middle is $2,500 off. Those are two different middles that are $7,500 apart. Meeting in the middle has nothing to do with fair. “Fair” is dependent on one’s point of view.
SOME ADVICE WHEN MAKING AN OFFER
Never offer more than you are willing to pay for a house, and never offer less than you are willing to lose it for.
Let’s say the price is good…too good. It may be time to look at things like resale value or turning the house into an investment property such as a rental. If the house is unique in someway, remember that it may take the same type of buyer as you to purchase it. Think of the future. Does it back up to a main road? That may not be a big deal to some people. Many houses back up to main roads, but it will take the same type of buyer as you to purchase it, one who does not care that it backs up to a main road.
Perhaps the house needs updates and that is why it is such a good price. No problem, if you do the updates before you decide to sell in a few years. I have lost count of the number of homes people have purchased with the good intentions of making those repairs or getting rid of that popcorn ceiling. Typically, when I come out a few years later to discuss listing their house, the repairs remain unfinished. I don’t judge, but it’s going to challenge my Marketing Department’s ability to get you the best sales price possible.
Many factors go into purchasing a home. My advice is not to get hung up on the sales price; it’s just one of many numbers involved in the transaction.
Next we will be looking at the wonderful world of inspections and appraisals.
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